Did you just feel a bottom?
As Kristina Cooke reports, “While banks may be less hesitant to lend to each other if they feel their rivals’ books have been credibly vetted, that does not translate into confidence to make new loans to small businesses and consumers.”
Worse, although money is cheap at the Fed – well, cheap in terms of interest, if not terms – banks may be the only businesses that enjoy any thaw in credit conditions. Michael Feroli, economist at JPMorgan, says the still sickly state of the economy means many borrowers’ creditworthiness has dropped, while demand for new loans has waned.
At best, the stress tests may represent the nadir in this sorry chapter of U.S. economics. And with troubled banks still facing a gap of more than $70 billion in capital, perhaps the bottom is still to be reached. Then again, $70 billion will hardly break the U.S. bank. Heck, AIG cam close to losing nearly that much in a single quarter.
Speaking of which, for those of you who played along with the consumerist.com‘s “Worst Company in America” competition, the results are in:
“The company deemed ‘too big to fail’ joins former champions Halliburton (2006), RIAA (2007) and Countrywide (2008) as ‘The Worst Company in America.’ With the win, AIG will receive the Consumerist’s not-so-coveted ‘Golden Poo’ trophy.
“The competition began with 32 companies separated into four brackets. Companies competed in head-to-head match-ups and the winner of each match-up was determined by the vote of Consumerist readers. The 32 companies included: AIG, Target, Peanut Corp of America, American Express, Walmart, HP, T-Mobile, Best Buy, Ticketmaster, TWC, Apple, United HealthCare, Verizon, Sprint, Home Depot, Citibank, Comcast, DirecTV, US Airways, Capital One, General Motors, United Airlines, Sears, Chase, eBay/Paypal, GE, Dell, Chrysler, AT&T, Circuit City, Starbucks, and Bank of America.
“‘As it turns out, taxpayer bailouts and ridiculously high-priced executive compensation packages aren’t a very popular mix,’ said Meghann Marco, Consumerist.com.”
Deals of the Day:
* Britain’s Carphone Warehouse Group PLC said it is in talks to acquire Tiscali’s UK operations for 236 million pounds.
* Healthcare-focused software maker Advanced Computer Software Plc said it has agreed with Business Systems Group to buy the technology services firm for about 15.5 million pounds ($23.4 million).
* Diageo’s talks to buy a stake in India’s United Spirits have not progressed as the two sides have been unable to agree on details, a senior Diageo executive said.
* The Australian government will allow Chinese steel maker Anshan Iron and Steel Group to triple its stake in Australian iron ore miner Gindalbie Metals, the latest Chinese footprint in Australia’s mining sector.
(PHOTO: A Bank of America branch is pictured in New York May 7, 2009. REUTERS/Shannon Stapleton)